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Postcard from Pipelineistan
Pepe Escobar, Tom Dispatch
What happens on the immense battlefield for the control of Eurasia will provide the ultimate plot line in the tumultuous rush towards a new, polycentric world order, also known as the New Great Game.
Our good ol’ friend the nonsensical “Global War on Terror,” which the Pentagon has slyly rebranded “the Long War,” sports a far more important, if half-hidden, twin — a global energy war. I like to think of it as the Liquid War, because its bloodstream is the pipelines that crisscross the potential imperial battlefields of the planet. Put another way, if its crucial embattled frontier these days is the Caspian Basin, the whole of Eurasia is its chessboard. Think of it, geographically, as Pipelineistan.
All geopolitical junkies need a fix. Since the second half of the 1990s, I’ve been hooked on pipelines. I’ve crossed the Caspian in an Azeri cargo ship just to follow the $4 billion Baku-Tblisi-Ceyhan pipeline, better known in this chess game by its acronym, BTC, through the Caucasus. (Oh, by the way, the map of Pipelineistan is chicken-scratched with acronyms, so get used to them!)
I’ve also trekked various of the overlapping modern Silk Roads, or perhaps Silk Pipelines, of possible future energy flows from Shanghai to Istanbul, annotating my own DIY routes for LNG (liquefied natural gas). I used to avidly follow the adventures of that once-but-not-future Sun-King of Central Asia, the now deceased Turkmenbashi or “leader of the Turkmen,” Saparmurat Niyazov, head of the immensely gas-rich Republic of Turkmenistan, as if he were a Conradian hero.
… Global financial crisis or not, oil and natural gas are the long-term keys to an inexorable transfer of economic power from the West to Asia. Those who control Pipelineistan — and despite all the dreaming and planning that’s gone on there, it’s unlikely to be Washington — will have the upper hand in whatever’s to come, and there’s not a terrorist in the world, or even a long war, that can change that.
Energy expert Michael Klare has been instrumental in identifying the key vectors in the wild, ongoing global scramble for power over Pipelineistan. These range from the increasing scarcity (and difficulty of reaching) primary energy supplies to “the painfully slow development of energy alternatives.” Though you may not have noticed, the first skirmishes in Pipelineistan’s Liquid War are already on, and even in the worst of economic times, the risk mounts constantly, given the relentless competition between the West and Asia, be it in the Middle East, in the Caspian theater, or in African oil-rich states like Angola, Nigeria and Sudan.
(24 March 2009)
China Takes Aim at Dollar
Andrew Batson, Wall Street Journal
China called for the creation of a new currency to eventually replace the dollar as the world’s standard, proposing a sweeping overhaul of global finance that reflects developing nations’ growing unhappiness with the U.S. role in the world economy.
The unusual proposal, made by central bank governor Zhou Xiaochuan in an essay released Monday in Beijing, is part of China’s increasingly assertive approach to shaping the global response to the financial crisis.
Mr. Zhou’s proposal comes amid preparations for a summit of the world’s industrial and developing nations, the Group of 20, in London next week. At past such meetings, developed nations have criticized China’s economic and currency policies.
This time, China is on the offensive, backed by other emerging economies such as Russia in making clear they want a global economic order less dominated by the U.S. and other wealthy nations.
(24 March 2009)
The Mexican Evolution
Enrique Krauze, Op-Ed, New York Times
AMERICA’S distorted views can have costly consequences, especially for us in Latin America. Secretary of State Hillary Clinton’s trip to Mexico this week is a good time to examine the misconception that Mexico is, or is on the point of becoming, a “failed state.”
This notion appears to be increasingly widespread. The Joint Forces Command recently issued a study saying that Mexico — along with Pakistan — could be in danger of a rapid and sudden collapse. President Obama is considering sending National Guard troops to the Mexican border to stop the flow of drugs and violence into the United States. The opinion that Mexico is breaking down seems to be shared by much of the American news media, not to mention the Americans I meet by chance and who, at the first opportunity, ask me whether Mexico will “fall apart.”
It most assuredly will not. First, let’s take a quick inventory of the problems that we don’t have. Mexico is a tolerant and secular state, without the religious tensions of Pakistan or Iraq. It is an inclusive society, without the racial hatreds of the Balkans. It has no serious prospects of regional secession or disputed territories, unlike the Middle East. Guerrilla movements have never been a real threat to the state, in stark contrast to Colombia.
… Now once again, we face enormous problems. The worldwide financial crisis is intensifying our ancient dramas of poverty and inequality. But the most acute problems are the increased power and viciousness of organized crime — drug trafficking, kidnappings and extortion — and an upsurge in ordinary street crime.
Enrique Krauze is the editor of the magazine Letras Libres and the author of “Mexico: Biography of Power.” This article was translated by Hank Heifetz from the Spanish.
(23 March 2009)
Mr. Krauze does mention Mexico’s declining oil reserves, which is the biggest problem that Mexico faces. -BA
Trade is Falling Faster in 2009 Than in 1930
Progressive Policy Institute
As G-20 members prepare to meet in London a week from Thursday, some dark predictions. The International Monetary Fund predicts that the world economy will contract by about 1 percent this year: The only such worldwide decline since the 1930s. The World Trade Organization foresees a nine-percent fall in trade, as businesses around the world cut back and families stay out of stores and malls: again the largest decline in trade since the Second World War.
…Goods imports have dropped by 34 percent from the July 2008 record, falling from $195 billion to $129 billion by January. (The last available month.) About half the drop is in commodity imports, and half in manufactured goods.
…Goods exports are down from a $121 billion peak, also in July 2008, to $82 billion as of January, or by 32 percent. The drop has been fastest in manufactured goods, with cars, chemicals and semiconductors hit especially hard; agriculture, pharmaceuticals, power equipment, and scientific instruments have held up a bit better.
…Services trade is the comparatively good news, holding up noticeably better than goods trade. Total services trade is down about 10 percent, falling from a July peak of $81 billion to $74 billion, with exports imports both down about 8 percent.
By way of alarming comparison, this six-month drop is a bit faster than the six-month fall at the beginning of the Depression, when trade fell from $920 million in October ’29 to $640 million by April of 1930: i.e., 30.4 percent. In May, the Congress added the Smoot-Hawley Act and foreign tariff retaliation to the effects of deflation and falling demand. Trade totals then fell by another 72 percent over the next three years, bottoming out at $184 million in February 1933.
(25 March 2009)
Why More of the Same Will Not Work
Jayati Ghosh, MRzine, Monthly Review
A visit to Western Europe in early March provided some slightly different — if unsettling — insights into global economic arrangements and their socio-cultural co-ordinates. As the crisis unfolds, people everywhere are questioning current economic institutions and processes, and naturally enough their fears, insecurities and concerns also affect their visions for the future. The fundamental issues relate to income and resource distribution (don’t they always?) but in this time of global crisis, the expression of these issues can become sharper and even more openly divisive in spirit.
Two features of some current public responses in these societies are especially relevant in this context. The first is the barely concealed animosity towards China and India (inevitably clubbed together, despite all the huge differences) as perceived beneficiaries of globalization and voracious consumers of global resources. The second is the general inability to conceive of a way out of the current global economic crisis in any way other than simply replicating the past, even though those past trends clearly cannot be sustained.
… Even among more progressive people in Europe, there is a palpable fear (sometimes unspoken and sometimes expressed only in subtle and qualified arguments) that growing consumption of such a large part of the world’s population will put an unbearable strain on global resources and therefore cannot really be supported.
There is certainly some degree of truth in this — there is no question that current “Northern” standards of life cannot be sustained if they were made accessible to everyone on this planet. This means that future economic growth in the developing world has to involve more equitable and sensible patterns of consumption and production. But that hardly deals with the basic problem. Even if the elite and middle class of the developing world, and particularly China and India, just stopped increasing their consumption, simply bringing the vast majority of the developing world’s population to anything resembling a minimally acceptable standard of living will involve extensive use of global resources. It will necessarily imply more natural resource use and more carbon emissions.
So the stark reality is that the developed world must, on the whole, consume less of the world’s resources and reduce its contribution to global warming absolutely. This in turn has effects on income as well. It is not immediately clear why rich countries with falling populations necessarily need to increase their GDP, and why they should not focus instead on internal redistribution and changing lifestyles, which could in fact improve the quality of life of every citizen.
The current crisis is an excellent — even unique — opportunity to bring about such shifts in socially created aspirations and material wants, and to reorganize economic life in the developed world to be less rapacious and more sustainable. But sadly, this message is not being heard at least among the major policy makers in the core capitalist countries. In the United States, even the relatively environment-friendly Obama administration simply talks about promoting “cleaner, greener technologies” rather than altering absurd and wasteful consumption patterns. For example, it is still basing its transport strategy on excessive reliance on private automobile use rather than more extensive and efficient public transport.
In Europe, too, the focus is on reviving and increasing the old (outdated?) patterns of consumption. Silvio Berlusconi in Italy has just pleaded with his people not to change their lifestyles because of this crisis, because this would reduce economic activity immediately! The implication is that wasteful and excessive consumption is socially desirable because that is the only way to preserve employment.
(26 March 2009)
Also posted at Common Dreams, which includes a picture of Jayati Ghosh.
It is extraordinary how few voices we hear from India and China. -BA
